net operating income

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Related to net operating income: Cap rate

Earnings Before Interest and Tax

A measure of a company's ability to produce income on its operations in a given year. It is calculated as the company's revenue less its expenses (such as overhead) but not subtracting its tax liability or interest paid on debt. It is important to note that EBIT does not account for one-off or otherwise unusual revenues and expenses, only recurring ones. EBIT represents cash available to pay off creditors in the event of liquidation and, as such, it is closely watched, especially when the company incurs little depreciation or amortization. It is also called operating profit.

net operating income (NOI)

The foundation of almost all analyses of income-producing property such as apartments,office buildings,and retail space.The number is the result of taking all rental and other revenues from the property and then subtracting all reasonably necessary operating expenses.Loan payments do not count as expenses for purposes of the NOI.If you,as the owner,pay yourself a salary of $100,000 a year but your job could be filled by someone at $35,000 a year, it is legitimate to make that downward adjustment in the expenses when presenting figures to a potential purchaser or lender. On the other hand, if you take no salary, do all the office work, make all repairs, and mow the lawn, then you will have to estimate what those expenses would be if a third party owned the project and enter that number as an imputed expense.

References in periodicals archive ?
Business development company MVC Capital Inc (NYSE:MVC) reported on Wednesday that it nearly broke even on its net operating income for the third quarter of 2011, compared to net operating income of USD4.
Both net operating income and financial income for the 12-month period increased, respectively from ISK31.
Three of the four budding types saw increases in net operating income (i.
Swedish home loans company SBAB Group reported on Thursday (4 November) a net operating income of SEK547m on interest income of SEK4.
Not only are the usual computations made for net operating income, projected appreciation and cash-on-cash return, but in addition, the indicated return must be adjusted for currency risk, given that dollars will have to be exchanged for the local currency in order to repatriate the invested funds.
Both pre-tax profit and net operating income for the nine-month period increased, respectively from ISK4.
Since in recent years there have been few sales of record and these have not warranted substantial increases in assessed values, the Assessor now determines assessed value primarily through capitalization of the prior year's net operating income before debt service, depreciation, and real property taxes.